🚨 Fed Delivers Third Consecutive Rate Cut: Funds Rate Now 3.50%-3.75% (LIVE LINK)

Federal Reserve Eases Policy in Divided Vote, Prioritizing Job Market Health

WASHINGTON D.C. – The Federal Reserve’s Federal Open Market Committee (FOMC) concluded its final meeting of the year today, announcing the widely anticipated decision to cut the benchmark federal funds rate by 25 basis points (bps). The third consecutive cut of 2025 moves the rate to a target range of 3.50% to 3.75%, the lowest level since November 2022. The move, while largely expected by markets (which priced in an 87-89% chance of a cut), underscores the central bank’s growing concern over the softening U.S. labor market, despite inflation remaining above its 2% target.

You can watch Jerome Powell LIVE (or replay) with this link.

The decision was not unanimous, highlighting a deep and persistent division among policymakers regarding the appropriate path for monetary policy. Three of the twelve FOMC members dissented from the decision. Fed Governor Stephen Miran voted for a larger, 50-bps cut, while Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austan Goolsbee preferred to hold the rate steady, arguing that inflation risks remain significant.

In its statement, the FOMC cited a shift in the “balance of risks,” prioritizing support for the job market amid slowing hiring and rising layoffs.  Officials are navigating a difficult economic landscape, further complicated by missing key government data due to recent reporting delays, which has forced them to rely on alternative indicators.

The rate cut is expected to further ease borrowing costs for households and businesses.¹² Consumers will continue to see incremental savings, particularly on variable-rate loans like home equity lines of credit and, indirectly, on new mortgages, which are influenced by the same forces driving Fed policy. The average credit card APR, however, has seen only marginal relief.

Eyes now turn to the updated Summary of Economic Projections (SEP), or “dot plot,” which will reveal officials’ forecasts for the fed funds rate in 2026.  Economists and traders are keen to see if the median projection shifts to signal more than the single cut projected in September. Fed Chair Jerome Powell’s subsequent press conference at 2:30 p.m. ET is expected to be a critical event, as markets parse his words for clues on the central bank’s forward guidance and whether this December move marks the end of the easing cycle or the beginning of a sustained downward trend heading into 2026.

Sources and Links

• Livemint: US Fed Meeting 2025 LIVE: Jerome Powell-led FOMC cuts key interest rates to 3.50%-3.75% amid elevated US inflation
• Investopedia: Fed Meeting Today: Fed Cuts Interest Rates For A Third Meeting In A Row
• Kiplinger: December Fed Meeting: Live Updates and Commentary
• Bankrate: The Fed May Cut Rates Again.¹⁷ Here’s How 5 Experts Are Taking Advantage